In response to this amendment, the Inland Revenue Department (IRD) has issued a notice outlining penalties for non-compliance. Individuals who deposit business incomes into personal accounts may face a fine. The penalty is calculated as either Rs 5000 or 2% of the amount deposited, depending on which amount is higher, for each instance of non-compliance.
This measure aims to ensure transparency and proper tax reporting by preventing the mingling of personal and business finances. It encourages businesses to maintain separate accounts for their operations, whether they are sole proprietorships or private limited companies, in accordance with the updated provisions of the income tax act.
It is advised to establish a bank account immediately and carry out all the transaction through such accounts only.
The notice is as follows -
